The construction of the "Belt and Road" is an important public product provided by my country to improve global governance and a major measure for my country to expand its opening up to the outside world. The construction of the "Belt and Road" has provided important opportunities and created good conditions for the internationalization of the RMB.

It is conducive to promoting the formation of the "RMB Zone". The optimal currency zone theory shows that several conditions are required to form an optimal currency zone in multiple countries: flow of production factors, economic openness, financial market integration, product diversification, trade structure complementarity and policy coordination. With the continuous advancement of the construction of the "Belt and Road", China and the countries participating in the construction of the "Belt and Road" have continuously improved infrastructure connectivity, investment and trade cooperation have been continuously deepened, and policy coordination capabilities have been continuously enhanced. The policy communication, facility connectivity, smooth trade, financial and people-to-people pursuits have created good conditions for the formation of the "RMB Zone". Policy communication will help China connect with the countries participating in the construction of the "Belt and Road" to promote regional economic integration; facilities connectivity requires a large amount of credit funds, which will help stimulate the international community's demand for RMB funds and solve the problem of funding gaps in major projects; smooth trade will help bilateral or multilateral cooperation in trade and investment facilitation, eliminate barriers, and improve the quality of regional economic development; Financial and financial connectivity will help expand the scale of bilateral local currency swaps between participating countries in the construction of the "Belt and Road", enhance the payment and settlement functions of the RMB, and promote the stability of the global monetary system and the construction of the credit system; people-to-people communication will help people from all countries to understand that using RMB can broaden fund channels, reduce financial costs, and avoid exchange rate risks.

It is conducive to accelerating the internationalization process of RMB. On the one hand, the "Belt and Road" construction requires huge capital demand, and huge capital demand requires long-term and stable capital investment, which is conducive to the export of the RMB to the outside world under the capital account and to form a return through cross-border trade under the current account. Although the internationalization of the RMB begins with trade settlement, investment will become an important driving force for the internationalization of the RMB in the future. On the other hand, many countries along the "Belt and Road" have relatively lack of financial services, small and medium-sized enterprises have difficulty in financing, and capital prices are generally high. As an important capital exporter in the world, China's strengthening financial connectivity with countries participating in the construction of the "Belt and Road" under the premise of controllable risks can not only accelerate the internationalization of the RMB, but also help these countries break through capital bottlenecks and accelerate development.

At present, there are relatively prominent financial cooperation between countries participating in the "Belt and Road" construction, "three more and three less" problems. First, there are many major projects supported by traditional credit methods, but fewer breakthroughs have been made in top-level design such as international credit standards. Second, Chinese financial institutions have participated more, while financial institutions and international financial institutions in countries participating in the construction of the "Belt and Road" have less participation. Third, there are more financial products in US dollar and euro, and fewer financial products in RMB in cross-border investment and financing. These three issues hinder the pace of RMB internationalization and have become problems that must be solved in the process of RMB internationalization.

In response to the above issues, the following aspects should be done to promote the internationalization of the RMB by taking the construction of the "Belt and Road" as an opportunity. First, strengthen the top-level design of financial cooperation and innovate the financial cooperation mechanism. The second is to adhere to the independence of monetary policy, implement a managed floating exchange rate system based on market supply and demand, ensure the relatively stable RMB value, and promote the opening of capital projects in an orderly manner. The third is to improve the regional monetary cooperation system, expand the scale of currency swaps, give full play to the advantages of the "Belt and Road" RMB special loans and funds, and provide facilitation services for investment, financing and trade cooperation. Fourth, in the countries participating in the construction of the "Belt and Road", we will promote RMB deduction and settlement of commodities such as oil, and gradually increase the use of RMB in international trade. Fifth, build a diversified RMB offshore center in countries participating in the "Belt and Road" construction with mature conditions, and realize multi-level development models such as trade-driven, investment-based pricing-driven and financial product innovation-driven.

(Author’s unit: China Development Bank)

"People's Daily" (Page 07, January 19, 2018)